Mr. David Luxton reports

KWESST ANNOUNCES 1-FOR-21 SHARE CONSOLIDATION

Subject to the final approval of the TSX Venture Exchange, Kwesst Micro Systems Inc. will effect a consolidation of the company's issued and outstanding common shares on the basis of one postconsolidation share for every 21 preconsolidation shares. The consolidation will be effective at 12:01 a.m. Eastern Daylight Time, April 23, 2025. The shares are expected to begin trading on the TSX Venture Exchange and the Nasdaq Capital Market on a consolidated basis on or around April 23, 2025.

The company's shareholders previously approved the consolidation at a special meeting of shareholders held on March 31, 2025, up to a ratio of one postconsolidation share for every 25 preconsolidation shares, such ratio and the implementation and timing of such consolidation to be determined by the company's board of directors at its discretion. The consolidation was effected pursuant to a resolution of the board dated April 2, 2025.

As at the date hereof, there are a total of 11,137,638 shares issued and outstanding. Assuming no other change to the issued and outstanding shares, a total of 530,363 shares, subject to adjustments for rounding, will be issued and outstanding.

No fractional postconsolidation shares will be issued as a result of the consolidation. Fractional shares will be rounded up to the next nearest whole number of shares if the fraction is at least half of a share and rounded down to the nearest whole number of shares if the fraction is less than half a Share.

The principal purpose of the consolidation is to increase the bid price of the shares to regain compliance with the continued listing requirements of Nasdaq. The company's name and trading symbol will remain unchanged following the consolidation. The new Cusip number will be 501506802 and the new ISIN (international securities identification number) will be CA5015068029 for the postconsolidation shares.

A letter of transmittal from the company's transfer agent, TSX Trust Company, has been sent to registered shareholders and is available on the company's SEDAR+ profile. The letter of transmittal contains instructions on how registered shareholders can exchange their share certificates representing preconsolidation shares for new certificates representing postconsolidation shares. Until surrendered, each share certificate representing preconsolidation shares will represent the number of whole postconsolidation shares to which the holder is entitled as a result of the consolidation. Shareholders who hold their shares in brokerage accounts are not required to take action to effect an exchange of their preconsolidation shares for postconsolidation shares.

The consolidation will not have any effect on the number of issued and outstanding share purchase warrants of the company which trade on the TSX-V under the symbol KWE.WT.U or on Nasdaq under the symbol KWESW. However, as a result of the consolidation, the number of shares issuable upon the exercise of each listed warrant will be reduced and the exercise price increased, the whole in accordance with the terms of the indenture and warrant agent agreement, as applicable, governing the listed warrants. Following the consolidation, the exercise of 21 listed warrants will be required to purchase one postconsolidation share and the exercise price will be $1,050 per share. No fractional share will be issued upon exercise of any listed warrants. The listed warrants will continue to trade on the TSX-V and Nasdaq, as applicable, in each case, under their existing Cusip numbers.

The exercise price and number of shares of the company issuable upon exercise of any other outstanding convertible securities will be proportionately adjusted pursuant to the consolidation.

The company believes that the consolidation is in the best interests of shareholders as it will allow the company to ensure continued compliance with Nasdaq's minimum bid price requirements.

About Kwesst Micro Systems Inc.

Kwesst develops and commercializes breakthrough next-generation tactical systems for military and security forces. The company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other Kwesst products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with OEM (original equipment manufacturer) products and battlefield management systems, and all come integrated with TAK (tactical assault kit). The company also has a new proprietary non-lethal product line branded Para Ops with application across all segments of the non-lethal market, including law enforcement. The company is headquartered in Ottawa, Canada, with representative offices in London, United Kingdom, and Abu Dhabi, United Arab Emirates.

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